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THE ABLE ACT

Good news! The federal government recently approved a new law, the ABLE Act. The purpose is to help individuals with disabilities save money to pay for their own care and living expenses, while allowing them to remain qualified for government benefits, outside of a special needs trust.

This law is expected to be approved soon by New York State. Here at Stefans Law Group, we will keep you updated on the latest details of the law and the status of its approval.

The new law will allow people with disabilities to open special savings accounts, similar to a 529 plan, where they can save up to $100,000 without risking eligibility for Social Security and other government programs.

This is a big change from the law that previously allowed an individual to have no more than $2,000 assets in his or her name to qualify for SSI.

Here are some of the important facts you need to know about the ABLE act:
To qualify, a beneficiary must have been blind or disabled before age 26, and either be entitled to SSI benefits or have a doctor’s certification of blindness or a “physical or mental impairment which results in severe functional limits.”

Each individual may only have one ABLE Act account per year.

Contribution to the account can be made by anyone.

The contribution must be made in “cash” (check or in-kind roll over).

The total amount of contributions per year is capped at $14,000.

The aggregate contribution to the account would be subject to an overrall limit matching the state limit for Section 529 accounts. However, if an account exceeds $100,000, the individual will not qualify for SSI benefits. The individual would still qualify for Medicaid, but only if the funds in the account are below the state limit for Section 529 accounts.

The account grows tax free if the funds are being used for “qualified expenses” that include education, housing, transportation, employment training, legal fees, and expenses. If used for other purposes, investment gains are subject to income tax and a 10% penalty.

The account owner, or a person appointed to make decisions on his or her behalf, will pick from the plan’s investment options.

Here at Stefans Law Group, we like to keep our clients informed of the legislative changes that could affect their families. We will keep our clients updated on the status of the ABLE Act as this could have a big impact on how individuals can save money and qualify for government benefits.

As a firm that handles special needs planning, our office is happy to discuss these new changes with you. For more information on the ABLE Act, and to see if this account might be the right fit for you or a loved one, call the attorneys of Stefans Law Group, at 516-692-2744.

The Health insurance reporting requirements on the 2014 tax return are a bit complicated. If you and your family were covered by an employer health care plan for all 12 months in 2014, there is no need for further clarification. Your return will be processed by simply checking the box to affirm that you had coverage all year.

If you had any months without medical insurance or obtained your insurance through a state or federal health insurance exchange, please read this important information.

Taxpayers not covered for health insurance for a portion of 2014

These taxpayers will need to report each month without coverage for each applicable family member (taxpayer, spouse and dependents) on the tax return. A penalty of up to 1% of adjusted gross income may apply. However, there are many exemptions to the penalty. We will be sure to review them when we prepare your tax return to ensure that you don’t pay a penalty if it can be legally avoided.

Taxpayers covered for health insurance through a state or federal exchange

A premium subsidy credit may have been applied by the exchange. This amount was estimated based upon the income declared on the application. The 2014 tax return will be used to validate the credit entitlement. This may result in an additional tax credit due (increase the refund) or the need to decrease a credit already received (additional tax due). You should be receiving form 1095-A from the exchange, showing the premium credit, and other information. Please be sure to bring that form in to us so we can correctly handle the reporting on your tax return.

Beginning in 2015, nearly all individual taxpayers will receive a new annual information reporting form from employers and/or insurance companies (forms 2095-B or 1095-C). These forms will be needed when completing the 2015 return. We suggest you save them with your other tax documents.

As always, we are here to support you. Feel free to call us with any questions you may have.
We wish you all a Happy, Healthy, Prosperous New Year.

Ten steps for Adult Children to Follow After a Holiday Visit with your Aging Parents

The holiday season is here again, and for many families, it is a time spent enjoying each other’s company, catching up on each other’s lives, and celebrating. However, for an adult child who may not have seen their aging parents in a while, the visit may turn into an unexpectedly overwhelming experience. Here at Stefans Law Group, we offer Geriatric Care Management and can help you to assess your parents’ current living situation and care needs, and come up with a plan to meet these needs.

If you are an adult child visiting your parents for the holidays, the visit may open your eyes to their changing abilities and needs. Aging parents sometimes hide their declining physical or cognitive abilities from their children.

There can be several reasons why an aging parent may do this, ranging from wanting to live independently, to denial that their abilities are declining, or even an inability to recognize the challenges they are having. If you have recently visited with your aging parent and find yourself overwhelmed wondering what to do next to help them, here are ten steps to get a handle on the process:

1.Assess the situation
If the situation your parent is facing requires urgent attention, you will have less time to obtain your parents’ and/or siblings input on managing it. In an urgent situation, it is important to you make sure you have the legal authority to make decisions for your parent.

Did your parent appoint you as his/her agent in a Power of Attorney and Health Care Proxy? If not, can you identify the agents and get them on board to help? If these documents were not drawn up, these documents should be drawn up immediately assuming your parent has the capacity to understand and sign them. If these documents were not drawn up, then you may have to start a Guardianship process with the court. At Stefans Law Group, we can help you to determine what steps should to be taken with these documents to assist your parents in decision making.

If the situation is instead based on an ongoing chronic decline, you will have more time to get input from family members on what steps need to be taken to help your parent.

2. Prioritize the needs
How is your parent managing his/her daily activities? Based on your observations, make a list of everything that needs to be done and prioritize the list according to urgency. Distinguish between wants and needs, and what must be handled at your parent’s home or from afar.

3.Safety First
Are there any safety concerns you see? Your parent’s safety should always come first. Anything that is or could become a safety issue should be dealt with quickly.

We offer Geriatric Care Management, and can coordinate an appointment for a Geriatric Care Manager to visit your parent’s home to point out safety concerns and make recommendations on how to resolve them.

4. Prioritize your parent’s independence
One of the most difficult challenges an aging parent faces is a loss of independence. When making decisions or recommendations for a parent, prioritizing his/her independence may make the changes easier for your parent to handle, and you may be met with less resistence.

5. Organize
Now that you have a prioritized list of needs you’ll need to address, start organizing that list. Make a spreadsheet with at least three columns. In the first, list the needs from highest to lowest priority. In the second, write the proposed solution, if you have one. In the third, write down the next step you need to take to work toward a solution.

6. What are your resources?
Add a column to your list and fill in the resources you know you have. For example, if grocery shopping is an issue and your parent has a trusted housekeeper, perhaps you can ask the housekeeper to pick up groceries or take your parent shopping, or perhaps the grocery store offers a delivery service.

7. Make a Plan
Look at your spreadsheet and fill in any blanks left in order to create a plan. If the list is mostly complete, determine who can help you complete the tasks.

8. Build a team
Identify family, friends, neighbors, volunteers along with other trusted advisors and professionals who can help you build and execute your plan.

9. Communication
Communicate with your family members and parents. The more help you can get in these situations, the less overwhelming it will be for you. Additionally, the more collaboration you can have earlier on in this process, the less roadblocks you may face in the future.

10. Execute your plan!
While these steps may seem overwhelming at first, try to handle each one at a time in the prioritized order. Remember, gain support and assistance from family, professionals, and those you trust. Be mindful that the plan will most likely change over time depending on your parent’s condition and resources.

As an estate planning and elder law firm, the attorneys and staff at Stefans Law Group can help create and implement a plan for your parents to meet their needs. To schedule a consultation, contact us at (516) 692-2744. We look forward to hearing from you!

Summertime: the season for sun, sandals, and tax planning. Kick back in your lounge chair and review the following suggestions for easing your 2014 federal income tax bill.

1.Preserve deductions. You’ve heard it before: Recordkeeping is essential. Examples of tax breaks that may be disallowed if you cannot provide proof include charitable contributions, gambling losses, vehicle costs, and travel and entertainment expenses. If you neglected to start tracking these expenses at the beginning of the year, get going now.
2.Bump up pre-tax retirement plan contributions. Elective contributions – the ones you ask your employer to withhold from your paycheck – reduce current-year taxable income. Compare the amount you’re presently depositing in your account to the maximum allowed, and make adjustments now to spread the impact over the rest of the year. The maximum 401(k) contribution for 2014 is $17,500. If you’re 50 or older this year, add an additional $5,500.
3.Reset basis with capital loss carry forwards. Would you benefit from selling an appreciated stock and using your loss carry forward to shelter the income? Planning point: Reacquiring the stock immediately after selling at a gain doesn’t incur the wash sale rules. At the same time, you get an increased basis to offset future gains.
4.Hold off on retirement plan withdrawals. In the early years of retirement, withdraw funds from taxable accounts in the most tax-efficient manner possible. For example, you could sell long-term stocks with a high basis first. The current tax saving is complemented by a longer-term benefit: continued tax-deferred growth in your retirement accounts.
5.Plan for required minimum distributions. What do you intend to do with the funds you’re required to take from retirement accounts once you reach age 70½? Tax-efficient investing strategies can reduce the tax on the income you earn on the distributed amount. Another suggestion: Using the funds for charitable donations can offset some of the tax from the distribution.
6.Gifting offers similar benefits. You no longer pay tax on the income from the gifted asset while the income tax paid by the recipient may be minimal or deferred. (Be aware of the kiddie tax.) For 2014, you can give $14,000 to anyone without incurring gift tax.
7.Track passive activity losses. Make sure you’re on track to meet the active or material participation rules for your real estate rentals and other passive activities. The requirements vary, but generally you must be involved in the activity in a material way, and you must have evidence proving your involvement, such as a logbook.
8.Check dependent status. Keep your college student qualified as your dependent by monitoring the “support” test. The rule: Generally, your child cannot provide over one-half of his or her own support during the year. Remember, too, that other relatives may qualify as your dependents, including parents in nursing homes.
9.Update payments. Update your withholding or estimated tax payments in light of life changes such as marriage, divorce, or starting a new business. Overpaying your 2014 tax reduces your available cash flow, but underpaying can lead to penalties and interest.
10.Open an education savings account. There’s no federal tax deduction for contributions to a 529 education plan. However, if you are currently setting aside money to pay for your child’s college expenses in a taxable account, you could realize tax savings by opening a 529 plan instead. Earnings on plan assets grow tax-deferred and can be tax-free when withdrawals are used for qualified education expenses.
11.Shift income. Broaden your tax-planning focus to include family members. For instance, say your parents or children are in a lower tax bracket than you are. Employing them in your sole proprietorship can provide net tax savings.
12.Review health insurance subsidies. Review your eligibility for the advance premium tax credit, a refundable credit that reduces the premium you pay for a health policy purchased on a government exchange. If you elected to have the credit applied to your premium and your 2014 income is higher than you expect, you may have to pay back all or part of the credit.

A loved one is brought from the hospital to a rehabilitation facility to receive nursing care and physical therapy treatment. Medicare is covering this cost. After a month of being provided with such care, the facility tells the family that their loved one is going to be denied Medicare coverage going forward because his condition is “no longer improving.” The family is faced with paying the private pay rate of a nursing home to the tune of $350.00 per day, or taking their loved one home when they are not ready because they cannot afford to pay this astronomical cost. Does this situation sound familiar to you?

There has been a recent trend amount nursing and rehabilitation facilities and agencies to deny Medicare services to patients because their conditions had not been “improving” during rehabilitative services. This “improvement standard” of assessing whether or not a patient should receive 100 days of Medicare has never been supported by Medicare regulations, and recently, the standard was successfully challenged in federal court.

What is being done to stop the practice of wrongfully denying Medicare coverage?
There is good news for Medicare beneficiaries who are wrongfully denied the full 100 days of Medicare coverage they are entitled to by the nursing or rehabilitation facility they are receiving care from. A recent court decision Jimmo v Sebelius helps to ensure that Medicare coverage is available for skilled services to maintain an individual’s condition, regardless of whether the condition improves.

In Jimmo v. Sebelius, the lead Plaintiff, Glenda Jimmo, was denied Medicare coverage for home health aides before her 100 days of Medicare were up due to her condition being “unlikely to improve.” The Court held that this “improvement standard” was improper, and that facilities or agencies must instead base Medicare eligibility decisions on whether a person demonstrates a reasonable and necessary need for a skilled care to maintain a beneficiary’s condition or to slow its decline.

What Medicare programs does Jimmo v. Sebelius apply to?
The standard of Medicare facilities must use, as directed by the Court, applies to both Medicare Advantage as well as the traditional Medicare program.

What Medicare services does Jimmo v. Sebelius apply to?
It applies to any beneficiary who requires skilled services to maintain one’s condition or prevent or slow its deterioration regardless of the underlying illness, disability or injury; Further, it applies to skilled maintenance services provided in all three care settings under Medicare Home Health, outpatient therapy and skilled nursing facility benefits.

What if my Medicare coverage was denied years ago? Is coverage under Jimmo v. Sebelius retroactive?
Medicare denials under these circumstances can be reviewed from January 18, 2011 going forward. The Jimmo settlement also establishes a process of “re-review” for Medicare beneficiaries who received a denial of skilled nursing facility care, home health care, or out-patient therapy services.

If you or loved one have been denied Medicare services because of a medical condition that has not “improved,” call Stefans Law Group, PC at 516-692-2744 and speak to one of our attorneys for legal assistance and professional guidance on your rights, and obtaining Medicare and Medicaid benefits you may be entitled to.

Here at Stefans Law Group, we like to keep our clients informed of the legislative changes that will affect their families. As of April 1, 2014 the New York Estate Tax exemption was raised from $1million to $2,062,500. This is great news! However, lack of planning could have your family paying hundreds of thousands in estate tax.

On April 1, 2014, Forbes.com released an article “The New New York Estate Tax Beware A 164% Marginal Rate” reflecting the New York State’s new changes and advising individuals to watch out for big traps in the new law. Here is some of the important information from that article:

Exemption Schedule:

DATE OF DEATH

EXEMPTION AMOUNT

April 1, 2014 to April 1, 2015

$2,062,500.00

April 1, 2015 to April 1, 2016

$3,125,000.00

April 1, 2016 to April 1, 2017

$4,157,500.00

April 1, 2017 to April 1, 2019

$5,250,000.00

The “Cliff”:

As of April 1st of this year, if you or your family member dies with just five percent (5%) more than the exemption amount, you face a “cliff”. This cliff, as the article explains is that you are going to be taxed on the full value of your estate, not just the amount over the exemption. Prior to April 1, 2014, New York would only have placed an estate tax on the estate’s value exceeding the one million dollar exemption. Now, if the estate exceeds the exemption by 5%, the entire estate is taxable to New York, with no exemption at all!

Look-back and Portability:

In addition to the changes indicated above, the article references a new three-year look-back for taxable gifts. This is very important for individuals to know! As of April 1, 2014 any gifts made within that three year time period will be added back into the taxable estate. The federal portability provision allows the surviving spouse to add the unused portion of his/her deceased spouse’s exemption to his/her own. This election is made on the first-to-die’s estate. New York did not add this to its legislation. Therefore, the State not exactly matching up to the federal law.

Like many things in life, if you start planning now for your future you can avoid those traps in the New York State laws. At Stefans Law Group PC, we provide services in Elder Law and Medicaid Planning, Estates and Trusts, Probate, Guardianship, and Tax Planning.We welcome the opportunity to sit with you and discuss your long-term planning needs. Contact us today at (516) 692-2744 to schedule an appointment to create a proper asset protection plan for you. You can also read further as to how to better protect your family from facing the “cliff” and other financial issues at Stefanslawgroup.com

At Stefans Law Group, we like to provide our clients with information to help prepare for their long term future. We believe planning for long term care is important for everyone and should not be neglected. We are always happy to help you plan. Here is some information for you to think about!

To begin, although this article provides information about long-term care providers such as Nursing Homes and assisted living, the overwhelming majority of care is provided by family members.

In December of 2013, USA Today reported that more than 8 million people used services of a long-term care provider in 2012. This is the first-ever compilation of federal data which profiles five types of long-term care providers in 2012 and will continue to issue new number every two years.

This new information provided in the National Study of Long-Term Care Providers is an effort by the National Center for Health Statistics to “get a better handle on the options for care and determine trends.”

The article touched on an important notion; long-term care services are not just nursing homes. Over the past 30 years the long-term care industry has evolved including adult day service centers, home health agencies, hospices, nursing homes, and assisted living and similar residential care communities. The areas indicated above include “58,500 paid, regulated long-term care entities are divided among the five sectors and employ nearly 1.5 million nurses and nursing aides.”

The long-term care agencies listed in this article are all helpful providers of care to the aging population. However, to this day much of the care provided to this population is from their family members and loved ones. People are concerned about paying for Nursing Homes that many do not want to go to. What many do not realize is that the cost of home care can cost as much as $4,000 to $10,000 a month in New York State!

Questions about how to prepare? We can help you.

Remember, Stefans Law Group, PC can provide the legal assistance and professional guidance to assist you with long term care and estate planning for you and your family. Take a few minutes and find out how important this planning is for your future.

We welcome the opportunity to discuss any questions you may have regarding these topics and your estate planning needs. Contact us today at (516) 692-2744 to schedule an appointment.

When a loved one passes away it can be a trying time on the entire family. When they pass away leaving a home, many decisions must be made in a quick period of time. Marketwatch.com reported on January 13, 2014 about how to sell an inherited home and here are some highlights from the article.

First, there is an emotional aspect to selling a loved one’s home and a financial cost of making necessary updates to attract a buyer. This is important to pin point and prepare to navigate through this time period.

Second, learn about the house’s status and verify your ownership, getting the advice of an Estate Attorney. Also, connect with a tax adviser to understand any tax implications of selling the home.

Third, those who are inheriting the home and do not want the property should speak with an attorney about disclaiming it-and promptly.

Lastly, is to assess the market. Before doing any work on the home, contact a real-estate agent to help you understand the local housing market. A real-estate agent can also provide some advice on what changes would be worthwhile to make. If the home is in very poor shape, it’s sometimes best to market it to an investor.

Leslie Piper, a consumer housing specialist for Realtor.com stated that “Everyone takes their time to deal with the passing of a loved one. And you need to take the appropriate steps to learn the market, educate yourself and having a Realtor and Tax Attorney who are reliable-you need someone who is going to be empathic and is there to help.”

Stefans Law Group, PC we believe this article is important for our clients to read in order to be aware of the decisions that need to be made and how we can help you navigate through this trying time. Call us at (516) 692-2744 to discuss this topic.

As always, we like to keep you up to date on the latest news that affects your tax world! We understand that New York State has some of the highest taxes in a variety of areas. It is a pleasure to report to you the Governor’s proposal for tax relief for New York State tax payers. Here are three great benefits from the January 6, 2014 proposal:
1) ESTATE TAX REFORM- “ New York is one of only 15 states that impose an estate tax, and the current estate tax level is badly in need of reform. While the federal government exempts the first $5.25 million of an individual’s estate, New York only exempts estates valued below $1 million. To end this unnecessary incentive for elderly New Yorkers to leave the state, Governor Cuomo proposes increasing the New York estate tax threshold to $5.25 million and lowering the top rate to 10 percent over four years. Beginning in 2019, the State estate tax exemption will equal the Federal exemption, which is indexed to inflation. This affects many peoples current estate plan. Let us review your legal plan.”
2) TWO YEAR FREEZE ON PROPERTY TAXES- In year one, the State will only provide tax rebates to homeowners who live in a jurisdiction that stays within the 2% property tax cap. In year two, the State will only provide tax rebates to homeowners who live in a locality that stays within the cap and also agrees to implement a shared services or administration consolidation plan. Additionally, this will NOT apply to New York City, which does not have a property tax cap.
3) RENTERS’ TAX CREDIT- Governor Cuomo proposes to provide tax relief for renters with incomes below $100,000 by offering a refundable personal income tax credit that increases with family size.

Please ask us more about this at your scheduled tax appointment.
Please read the Governor’s report for additional benefits and further information at ny.gov

Remember at Stefans Law Group PC, we provide services in Elder Law and Medicaid Planning, Estates and Trusts, Probate, Guardianship, and Tax Planning. We welcome the opportunity to help you. Call us today at (516) 692-2744 to schedule an appointment to discuss your plan. We wish you and your family a Happy and Healthy New Year!

New York Elder Law Attorney

Ring out the old, ring in the new, Ring, happy bells, across the snow: The year is going, let him go; Ring out the false, ring in the true. -Alfred, Lord Tennyson, 1850

Charitable IRA Rollover Provisions Set to Expire!

December 31st is the last day of 2013 and the last day for individuals to utilize the Charitable IRA Rollover Provision and save on taxes when donating to charity. The provision allows individuals ages 70 ½ or older to donate up to $100,000 of IRA assets to charity without reporting the withdrawal as taxable income.

Here are three major benefits to this provision:

1. Reducing Taxable Income – The provision can help retirees avoid or reduce a host of taxes and penalties, including many tax increases that took effect this year.

2. Annual Distribution Credit – The provision allows the donation to count toward the annual required minimum distribution that is required for individuals over the age of 70 ½.

3. Social Security Benefits – The rollover provision can also help taxpayers avoid or reduce taxes on Social Security benefits and avoid higher Medicare Parts B and D premiums, which kick in when adjusted gross income exceeds $85,000 for individuals or $170,000 for couples.

As of this year, individuals with more than $200,000 of adjusted gross income and couples with more than $250,000 are subject to the new 3.8% tax on net investment income. Additionally, individuals with an adjusted gross income (AGI) of $250,000 and couples above $300,000 now start losing personal exemptions and itemized deductions. As income rises, you can also lose deductions for medical expenses, casualty losses and miscellaneous itemized deductions.

Receive the information and the sound advice you need to make important financial decisions by scheduling a confidential consultation with an experienced estate planning and elder law attorney who will tailor representation to meet all your health care, tax planning and elder care needs. Call the Stefans Law Group toll free at (800) 882-3625. If you prefer, fill out our intake form below and we will contact you. Let our family help your family.